Tan Dan Ltd Is Planning to Purchase a Fixed Asset

question 17

Multiple Choice

Tan Dan Ltd is planning to purchase a fixed asset costing $150 000 in total.The planned delivery date is 1 December 2013 with settlement on that date.A deposit of $20 000 is to be paid on 1 July 2012.The amount that will appear in the cash budget for December 2013 is:

• A)$150 000 outflow
• B)$20 000 outflow
• C)$130 000 outflow
• D)$20 000 inflow

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Definitions:

Fiscal Policy

Government policies regarding taxation and spending that are employed to influence economic conditions, including stimulating or restraining economic growth.

Multiplier

An economic factor that quantifies the additional effect on income or output resulting from an injection of spending.

Deflationary Gap

A situation in economics where actual production is lower than the potential output level, often resulting in unemployment and unused productive capacity.

Equilibrium GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand in an economy.